Apple shares opened down 3pc in New York on Wednesday, as the market digested
the technology giant's first fall in profits in a decade.

However, news of its $60bn (£39bn) share buy back went some way to placating investors, and the company started climbing in value again shortly after markets opened. By 9.45am in New York, Apple's share price stood at $407.63, up from its $406.13 close on Tuesday.

Chief executive Tim Cook said last night that Apple would devote $60bn (£39bn) of its $137bn cash pile to a share buyback progamme, and that it would increase its dividend by 15pc to $3.05.

Apple profits fell 18pc, or $2.1bn, to $9.5bn on sales of $43.6bn. The technology giant said it sold 37.4m iPhones and 19.5m iPads in the first three months of this year, up 6.7pc and 65pc respectively. Margins dropped to 37.5pc, from 47pc a year ago.

Mr Cook declined to give investors any hints on future products. However, he said that “we have some great stuff coming in the fall and across all of 2014”, and emphasised that Apple’s strength came from its library of apps and existing customer base.

“We have the best ecosystem by far, and we’re just going to keep augmenting it and making it better and better,” Mr Cook said. “That shows up in our loyalty and ratings.”

Although analysts have predicted that Apple could launch both a cheaper iPhone for the emerging market and a larger one to compete with Samsung’s 5” S4 model, Mr Cook said that older models of the existing iPhone were selling well in the crucial Chinese market, and that larger screens required too many compromises.

“Some customers value a large screen size. Others value other factors. Our competitors have made some significant trade-offs in many of these areas in order to ship a larger display. We would not ship a larger display iPhone while these trade-offs exist,” he said.

Gartner analyst Carolina Milanesi agreed that selling older iPhones in developing markets made sense. “A more aggressively priced iPhone 4 makes a difference in emerging markets because users don’t face the same contract terms we see in mature markets”, she said.

Mr Cook also dashed hopes that payment technology would be built in to Apple’s highly sought-after products in the near future, saying that the idea, already adopted by Samsung, remained “in its infancy”.

Apple shares rose 5.5pc in extended trading, after closing up 1.9pc at $406.13, still far below September’s record high of $702.10.